This Slide set is based on a presentation that Semiconductor Industry Research Institute Japan (SIRIJ) gave to Governments/Authorities Meeting on Semiconductors (GAMS) in Kobe, Japan in 2010.  The GAMS is composed of governments and authorities from the World Semiconductor Council (WSC) regions.  The WSC is composed of the Semiconductor Industry Association in China, the Semiconductor Industry Association in Chinese Taipei, the Semicondutor Industry  Association in Europe, the Semiconductor Industry Association in Korea, the Semiconductor Industry Association in Japan and the Semiconductor Industry Association in the U.S.  

See www.semiconductorcouncil.org

The SIRIJ is a think tank established to study and revitalize the semiconductor industry.  

See www.sirij.jp

Semiconductors’ Social Contribution- Research Report in Japan -

September 16, 2010, Kobe

Masao FukumaSemiconductor Industry Research Institute Japan

(SIRIJ)

1

2

Outline

1) Introduction

2) Semiconductors’ Contributiona) Technology Spreading-outb) Productivity Improvementc) Consumer Surplusd) Green of/by Semiconductors

3) New Products/Services

4) Summary

Big Concern

Semiconductors are widely used in human societybut do NOT attract one’s notice directly

Ordinary people do not pay any attention to the contribution of the semiconductor industry

Semiconductors improve

fuel efficiency??

3

Purpose of this Report

To clarify the social influence and contribution of the semiconductor industry

To show the importance of the semiconductor industry

4

Visible influence

Immediate and tangible influence

Invisible influence

Influence on deep part of society and economics

GDP Boost

Employment increase

Green contribution of semiconductors

New products/services

Business model innovation

Technology spreading out

Productivity improvement

Consumer surplus

Visible and Invisible Influence

Green contribution by semiconductors

5

Visible influence

Immediate and tangible influence

Invisible influence

Influence on deep part of society and economics

GDP Boost

Employment increase

Green contribution of semiconductors

New products/services

Business model innovation

Technology spreading out

Productivity improvement

Consumer surplus

Visible and Invisible Influence

Green contribution by semiconductors

6

Outline

1) Introduction

2) Semiconductors’ Contributiona) Technology Spreading-outb) Productivity Improvement (TFP)c) Consumer Surplusd) Green of/by Semiconductors

3) New Products/Services

4) Summary7

a) Semiconductor Technology Spreading-out In

dust

rial M

arke

tC

onsu

mer

Mar

ket

ProductionProcess

Analysis Technology

Specific DigitalSignal Processing

Digital SignalProcessing

Electromagnetic Wave Shield

Long-life treatmentof Tools

Thin Film Technology

Coating(Automotive Interior,Building Materials and Fishing Lure etc.

Vacuum Technology

Vacuum Tube

Magnet

Printed Ink Foaming Machine

Vacuum Technology

Water Intimate Mirror using Optical Catalyst

Optical Reflection Film/Penetration Film/Anti-Reflection Film

Sunshine Reflection Glass

Wrapping Filmfor Food/Medical Goods

Implant/ArtificialTooth

Vacuum Insulator

Processing Food/Medical Goods

Vacuum PenetrationHair Restoration

Prevention of Sunburn

Vacuum Chilled Refrigerator

Resist App.

Doping Technology

Film FormationDesign Wafer SubstrateCleaning

C A E

Thin Film Technology

Technology Spreading-out refers to the effect that technology advances in one industry have on other industries.

8

Technology Spreading-out Effect in Japan

Markets of the Products utilizingSemiconductor technologyin Japan (Fiscal Year 2007)

Common Technology

MixedTechnology

Film DepositionTechnology

Fine PatternigTechnology

MeasuringTechnology

40

3,500

1,000

500

2,400

(¥ billion)

To multiply attributablefraction of each technology

To calculate by using the inter-industry relations table

First Effect Second Effect

¥5,500 B ¥16,000 B

Total Value

¥21,500 B

TotalDomestic

Production

¥7,440 B

9

Technology Spreading-out Effect ComparisonAviation Industry Semiconductor Industry Automotive Industry

1970～2000 1970～2007 1970～2000

Intra-IndustrialEffect

Inter-IndustrialEffect

(Technology Spreading-out)

(Application Expansion)

¥12 trillion ¥285 trillion ¥872 trillion

¥103 trillion ¥399 trillion

¥34 trillion

(Remarks) Semiconductor industry was figured based on industrial correlation table in 2005. Automotive and Aviation industry were figured based on industrial correlation table in 1995.

(Source) SIRIJ produced based on Mitsubishi Research Institute and Nikkei Electronics issued on July 28, 2008.

¥14 trillion ¥103 trillion ¥333 trillionProducts

10

TFP accounts for changes in economic output that are not caused by changes in the amount of labor and

capital. TFP includes changes in labor productivity (output per worker) and capital productivity (output per

unit of capital) due to factors such as technology advances, business model improvements, etc.

Capital

Labor

GDP Growth Rate

TFP(innovation)

Growth Rate(%) Input Output

-2

0

2

4

6

8

10

12

GDP Growth Rate TFP Capital Labor

b) Total Factor Productivity (TFP)

11

TFP Influence on GDP Growth Rate

TFP: Total Factor ProductivityInnovationInnovation-originating improvements of labor and capitalManagement efficiency Improvement- - -

Japanese GDP Growth Rate vsTotal Factor Productivity Growth Rate

< 2000 - 2007 in Japan >

・Average GDP Growth Rate from 2000 to 2007 is 1.45%.

・Average TFP Growth Rate in same period is 0.57%.

(Source) Professor Motohashi, Tokyo University

TFP contribution to GDP growth rate~40%

12

2000-2007 TFP Growth Rate 0.57%

TFP Analysis IT Computers 0.14%Software 0.01%Communication 0.06%Semiconductors 0.04% Sub total 0.25%

Non IT Semiconductors 0.09%Others 0.23% Sub total 0.32% Total 0.57%

Semiconductor Total 0.13%

Semiconductor Portion in TFP

23% (=0.13/0.57)@2000-2007, Japan*

SemiconductorInnovation

Higher PerformanceLower PriceNew business Model

TFP Growth

Semiconductor Contribution to TFP

*Since the model is generalized, it is applicable to any country/region.13

c) Consumer Surplus by Semiconductor Innovation

Consumer Surplus by Semiconductor Innovation : ¥6.67 T (‘95-’05)

Demand Curve

Q Q’

P

P’

Price

Quantity

Consumer Surplus

Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay. Economists measure consumer surplus to quantify the benefits that consumers receive from falling prices.

14

Increase of Service/ Demand

Improvement of efficiency/ Resource saving/ Electric power saving

Increase of CO2 emissions

Increase of Semiconductor

- Growing PC/terminal/server- Soaring Internet access- Rapid increase of energy demandby emerging market/service demand

- Improvement of energy consumptionefficiency in equipment

- Resource saving and energy conservation by creating new service/system such as ETC, Smart Meter, etc.

- Electric power saving by semiconductor

d) Green of/by SemiconductorsDo Semiconductors Contribute to the Reduction of CO2 Emissions?

Decrease of CO2 emissions15

Reduction of CO2 Emission by ETC

2006 CO2 reduction by ETC in Japan : 160 thousand ton-CO2

Traffic congestion[ km・h/day ] % of ETC use

ETC Use >80% @2010

ETC : Electronic Toll Collection System

16

-19 +14-5 +7

-30

-10

-5

-15

-20

106ton-CO2

Energy savingsin appliances

Fully utilizingappliance

Resource savingby new services

Additional appliance

• 5M households, 2.6 people( 1.4 worker)/household• Possible energy saving technology in appliance• Additional appliance ; one monitor and PDA / person• Two working days at home (two telecommuting/week)

Energy Consumption Reduction in Future Homes

17

Outline

1) Introduction

2) Semiconductors’ Contributiona) Technology Spreading-outb) Productivity Improvementc) Consumer Surplusd) Green of/by Semiconductors

3) New Products/Services

4) Summary18

Market Trends

Convenience & Entertainment

Future Market of Symbiotic ComputingExisting and New Market

Health SafetyReliability

Assist & Support People

Real World, Society

Deeper Man-Machine Collaboration (Symbiosys)by the Reliable Embedded Computing Network

Market of Embedded Computing(Digital Consumer, Automotive, Industrial)

RobotSensor Net NGN Wearable

Low Cost, Energy Conscious, Dependability

BANIntelligent Vehicle（Computer Vision）

Home Network（Wireless HD etc）

Connectivity

Ubiquitous

Intelligence

Cognitive Radio

Symbiotic

Green

Smart Grid

19

Expectations for Semiconductors

◇Life Recorder （Bandage-type Sensors/BAN)Healthcare

Medical ◇Capsule endscope（Small size・Ultra low-power module/BAN)◇Medical recorder for EBM（sensinng and recording/BAN）

Agriculture ◇Sensing-based Agriculture（Ultra Low-Power sensing unit /LAN）

Home ◇200years lifetime house（monitoring sensors/PAN)◇IT Power Grid Network (Smart meter/Smart Appliance)

Home Robot ◇Care and household Robots（Robotic arm）/ Wireless Camera Module

UltraLow-Power

・・・

SizeEasy to useWireless NW Image New

SensorsModule/Cost

Compact and low-power wireless devicesEfficient image recognitionNew sensorsEfficient power supplyService oriented

Innovative SYSTEM-KEY Devices

20

Challenges for “Symbiotic Society”

SensorMCU/

IntelligentProcessor

RF

Power SupplyManagement

New markets of Symbiotic Society: ”Cyber-World” + “Real-World”

Networking

Processing

Power Supply

RF/Analog

Logic, Memory

More than Moore

More Moore

Connectivity

Intelligence

Speed, Pressure, Vibration, Light, Location, Temperature, Energy NodesPower device

Sensor/MEMS

Cyber W

orldR

eal

Wor

ld

Health care, Environment, Energy(Green), Safety & Security

Image recognition,Search, Semantic analysis

Server(Cluster)

Electronics devices are now penetrating into the society more deeply, and are directly connected to human beings and environment.

1) Functional devices: RF, analog, sensors, MEMS and photonics.2) Intelligent devices for vision, voice and security.

Real world sensing, control

21

Outline

1) Introduction

2) Semiconductors’ Contributiona) Technology Spreading-outb) Productivity Improvementc) Consumer Surplusd) Green of/by Semiconductors

3) New Products/Services

4) Summary21

Semiconductor's Contribution to our Society (Japan*)

Our Society

GDP (2007 nominal) ¥516 trillion

Manufacturing Industry¥109 trillion

Semiconductor Application ¥48 trillion

Semiconductor and equipment

¥2.2 trillion

Intra-Industrial Effect: ¥285 trillion

(1970~2007, accumulated)

Inter-Industrial Effect: ¥399 trillion

(1970~2007, accumulated)

Technology spreading-outto 24 industries

Semiconductor's attributablefraction of TFP: 23%

(2000~2007)

Consumer Surplus originated by Semiconductor Innovation:

¥6,699 billion (1995~2005)

Energy Saving in Future Home:3 million ton-CO2/year

Employment: 200 thousand(Inc. application 2.4 million)

Market of Nano Electronicsapplied equipment:

¥40 trillion in 2035

Power Consumption of Semiconductor:

2000=100 ⇒ 2007=6

CO2 reduction by Semiconductor & IT:

18 million ton/year

Trade balance: ¥37 trillion(Inc. application)

Share in GDP of Manufacturing: 44%(Inc. application)

*The model used here can be general, and be applied even in another country and another region.

23